Addition on unexplained paintings - painting are stated to be received by the assessee as gift on various occasions from the artist - Held that:- The perusal of these documentary evidences as placed in the paper book support the stand of the assessee that these paintings were acquired by the assessee much prior in earlier years and the revenue had no justification to add the same. The assessee, prima facie discharged the primary onus of proving the source of these painting and the onus was shift .....

ng to ₹ 0.52 Lacs has been made by the assessee vide DD No.56463. A perusal of stock record of M/s reflections as on 31/03/2008 reveals that these painting forms part of the closing stock. Therefore, since the same have duly been accounted for in the books of accounts of the assessee and forms part of stock-in-trade, the addition thereof is not justified.
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So far as the addition on account of unexplained jewellery is concerned, we are of the opinion that the same is a factual one requ .....

ainting / Archives / Interior Designing under proprietorship concern namely M/s Reflections, was assessed for impugned AY u/s 143(3) read with section 153B consequent to search action on 17/04/2007 on ACG Art group, the assessee being part of the said group. 2.2 To Ld. AO noted that ACG art group was one of the multi locational organizations belonging to a business group in Mumbai. The group dealt in manufacturing of gelatin capsules and also traded in painting and sculptors under its concerns n .....

indulged in procuring bogus purchase bills of paintings. Further, unaccounted painting totaling 288 in number valued at ₹ 999.20 Lacs were found / inventorized during search operations out of which 71 painting were put under constructive seizure u/s 132(1)(iii). 2.4 The assessee filed her return of income for impugned AY on 29/09/2008 at ₹ 22.66 Lacs which was finally assessed on 30/12/2009 at ₹ 293.43 Lacs after addition of ₹ 41.81 Lacs on account of unexplained jewelle .....

s diamond jewellery weighing around 106.90 grams, 15.510 carat valued at ₹ 16.53 Lacs. 2.6 The assessee produced various evidences to demonstrate the date / cost acquisition of the paintings. However, not convinced, Ld. AO rejected the evidences submitted by the assessee with respect to certain paintings valued at ₹ 244.95 Lacs, the details of which has been provided in the Annexure attached to quantum assessment order and added the same to the income of the assessee. 3. Aggrieved, t .....

amp; cheque payment 4. 7 33 Lacs Painting received on consignment basis 5. 7 10.60 Lacs Low value paintings 6. 3 0.60 Lacs Only prints and not actual paintings 7 1 4.00 Lacs Supported by Letter dated 29/04/2008 The assessee contended that since source of acquisition of each item was fully explained, addition thereof u/s 69 was not justified. However, Ld. CIT(A) noted that no confirmatory letters confirming the gift could be produced by the assessee. The Ld. CIT(A) also noted discrepancies in the .....

ee which restricted the impugned additions against jewelry to ₹ 37,01,558/-. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Counsel for Assessee [AR], drawing our attention to the documents placed in the paper book contended that the assessee produced certain evidences before lower authorities to demonstrate that the paintings in dispute were acquired by the assessee long time back and few paintings were received either in gifts or kept with the assessee by artist on sa .....

tum assessment order. The Ld. CIT(A) has already allowed relief with respect to one painting listed at Serial No. 1 in the above table and valued at ₹ 20 Lacs. Hence, the dispute before us is with respect to 30 painting valued at ₹ 224.95 Lacs, each of which we shall deal in subsequent paragraphs. 6. The painting listed at Serial No. 2 consists of two paintings valued at ₹ 5 Lacs & ₹ 25 Lacs respectively. These paintings were found at Swapnalok and crafted by an Artis .....

the signatures of the artist. The factum of the gift has been inscribed by the artist at the back of these paintings. In our considered opinion, the seized material, in itself, becomes evidence supporting the stand of the assessee. Hence, addition thereof was not justified and the same stand deleted. 7. The details of ten painting listed at Serial No. 3 valued at ₹ 146.75 Lacs is as follows: No. Location & Valuation Ref. No. Artist Name Titled Medium Size Value 1. Dalamal 8 Jehangir J .....

/- 8. Swapnalok 5 K.H.Ara Nude Water Colour 27x20 6,00,000/- 9. Swapnalok 7 A.R.Chugta Lady Holding Jug Water Colour 20x14 30,00,000/- 10. Swapnalok 8 A.R.Chugta Lady & Music Instrument Water Colour 20x14 30,00,000/- Total 1,46,75,000/- The assessee, in the paper book, has placed various documentary evidences to support the contentions that these painting were acquired by the assessee long time back in earlier assessment years in the following manner:- No. Location & Valuation Ref. No. A .....

heque dated 16/01/1988 & 08/02/1988 aggregating to ₹ 18500/- 7. Swapnalok 2 Jamini Roy Evidenced by photograph dated 16/08/1996 showing painting in the background 8. Swapnalok 5 K.H.Ara Receipt dated 20/04/1977 for ₹ 850/- supported by Internal Memo dated 27/04/1977 The perusal of these documentary evidences as placed in the paper book support the stand of the assessee that these paintings were acquired by the assessee much prior in earlier years and the revenue had no justificat .....

10 belonging to an artist A.R.Chugta valued at ₹ 60 Lacs are supported by the voucher dated 12/02/2001 and the payment thereof amounting to ₹ 0.52 Lacs has been made by the assessee vide DD No.56463. A perusal of stock record of M/s reflections as on 31/03/2008 reveals that these painting forms part of the closing stock. Therefore, since the same have duly been accounted for in the books of accounts of the assessee and forms part of stock-in-trade, the addition thereof is not justif .....

Patil is confirmed by the letter of the artist and further, the artist subsequently, vide letter dated 07/05/2007, has duly acknowledged the receipt back of these painting from the assessee. Similarly, the painting of Jagan Chowdhuri is supported with a letter dated 17/04/2007. In our considered opinion the assessee, by submitting these evidences, duly discharged the onus casted on him to substantiate the source of these painting. The onus was shifted on revenue to negate the evidences adduced b .....

amely M.V.Dhurandhar valued at ₹ 3 Lacs each is supported by receipt dated 19/01/2000. From the perusal of stock record of M/s reflections as on 31/03/2008, it is seen that these painting forms part of the closing stock. Therefore, since the same have duly been accounted for in the books of accounts of the assessee and forms part of stock-in-trade, the addition thereof is not justified. No serious arguments have been adduced against other low value paintings aggregating to ₹ 4.60 Lac .....